Why people afraid of raising the minimum wage are missing the point

When Bloomberg published a column about a bill to raise the federal minimum wage to $15.00 an hour, they called the plan "scary."

"To absorb the higher wage costs, businesses can react in a number of ways," the article explains. "The response that gets the most attention is to reduce the number of people they hire and employ."

Indeed, while increasing the minimum wage would increase most people's salaries, some jobs would disappear. The article points out many companies will likely find ways to automate jobs rather than pay such expensive workers.

But here's the thing: If our society can produce what people need without employing everybody full time, that's not necessarily a problem. The problem isn't less work; it's bad resource distribution. There's plenty to go around, there just isn't a system in place for moving around that plenty.

So instead of fearing automation and unemployment, we could welcome it — as long as we can find a way to evenly distribute all this newfound efficiency and free time. Perhaps we're ready for a society where people simply work fewer hours for the same amount of stuff.

Whatever society results from all this new efficiency will need more than simply higher wages. It'll need higher wages for less work, and that means a shorter workweek. Perhaps we could even afford to get rid of certain industries that don't do much good for society (telemarketing, for instance). Pruning off the more predatory industries in the economy could save people time and save the environment resources.

Of course, increasing the minimum wage on its own won't necessarily bring around this new reality. Other policies — decreasing the work week, free education to help unemployed workers enter new fields, tax incentives to help small businesses compete, taxing automation — may be needed too.

Perhaps Bloomberg's original title, something like "The fight for $15 push isn't ready for prime time" judging by the article's URL, is closer to accurate. Increasing the minimum wage will have repercussions that echo throughout the economy, and it's not clear politicians pushing the policy have planned for all those effects. Increasing the minimum wage and leaving the rest of the economy unchanged isn't too much; it's not enough.

But maybe it's all moot – for now, it looks like the bill has all but died in the Senate.